The Joint Municipal Pension Fund (JMPF) said on Monday it will seek to recover its full R1,4-billion loss suffered due to investments made by WJ Morgan & Associates, on behalf of the fund, in agricultural futures during December 2002 and January 2003.
This is according to a statement released by the chairperson of the JMPF’s interim board of trustees, Jan Mahlangu.
“Members and pensioners of the JMPF saw the beginning of justice done when the appeal of WJ Morgan & Associates (Pty) Ltd, WJ Morgan (senior) and WJ Morgan (junior) against the decision by a disciplinary tribunal of the JSE Securities Exchange to terminate the company’s brokerage licence and the individuals’ right to trade was dismissed with costs last week,” the JMPF said.
“The trustees must further pursue actions against such people as could be held liable for the loss,” the fund added.
“A civil claim for recovery of the loss has already been instituted against WJ Morgan & Associates and its former directors. Further possible steps and actions are envisaged,” the JMPF said.
“Although these actions take a long time to bring before the courts, the trustees will carry them through to conclusion,” the fund added.
Due to the loss, the JMPF has reduced certain benefits of its active members and pensioners.
A special 12% pension increase granted on March 1 2002 was cancelled with effect from November 1 2003.
In addition, the fund will — under normal circumstances — not be able to afford pension increases in the foreseeable future.
The actuary of the fund has, however, indicated that the trustees will be able to consider granting pension increases if the fund’s investment performance should exceed certain levels as determined in the actuarial valuation.
To this extend the fund is currently busy, with the help of a reputable investment consultant, with a major restructuring of its investments in order to position the fund to be able to achieve and even exceed the required return.
The funding level of the fund in June 2003 — after taking into account the effect of the reduction in benefits and pensions — was more than 95% and the fund should therefore be able to meet its current obligations to members and pensioners.
Disclosure to and communication with the members and pensioners is another duty placed on the trustees and they have by means of circulars and at the fund’s annual general meeting and six regional meetings held during August 2004 been in constant contact with the fund’s members and pensioners.
The interim board of trustees will report back to the High Court during November this year, whereafter the fund’s members and pensioners will be advised of any further developments, the JMPF said. — I-Net Bridge